Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

I thank Deputy Griffin. As the Deputy mentioned, the Government recognises in the programme for Government the role that credit unions play in society as a volunteer co-operative financial institution. The economic outlook, including reduced demand for new lending, rising household savings and continued low return on investments, has exacerbated the challenges the Deputy referenced that existed before Covid-19 and the perfect storm that we need to turn away from.

We committed in the programme for Government to a review of the policy framework. The policy review will take into account work already completed, such as the Credit Union Advisory Committee report which I expect to receive shortly. We will also take into consideration the report published last week by one of the representative bodies, and other views of stakeholders in the sector.

The Deputy will be aware that the current policy framework for credit unions was introduced from 2012 to 2016 and was based on the recommendations of the Commission on Credit Unions. The implementation of these recommendations was the subject of a review by the Credit Union Advisory Committee in 2016. Both I, the Minister for Finance and officials will continue to engage constructively to assist credit unions in delivering new services to their members, including other Government initiatives such as the credit guarantee scheme and initiatives in retrofitting.

It is important to say that there is no legislative or regulatory barrier to the involvement of the credit union sector in the credit guarantee scheme, for example. I encourage credit unions which can involve themselves in that to do so because it will allow them to lend into that structure which will help their balance sheet, which the Deputy referenced. Similarly, there is no regulatory restriction hindering credit unions investing in a National Treasury Management Agency, NTMA, auction or purchasing bonds in the secondary market. However, there is an overarching difficulty in the European context with the way the ECB has flooded the liquidity markets. That has an impact on credit unions and other financial institutions in terms of their balance sheet.

We must support credit unions to increase their lending capacity into communities which will help their balance sheet, and we must support, as I do, their ongoing expansion of services. With the input of Deputy Griffin and others, it is to be hoped we can have a more positive pathway for the sector. That is what we are ambitious about.

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